Under a best efforts arrangement, the investment banker purchases all of the shares from the issuing firm and then resells them to the public. Under this arrangement, the investment bank assumes significant risk.

Question

Quizplus · Accepted Answer

In a best efforts arrangement, the investment banker agrees to sell as much of the offering as possible but does not guarantee the sale of all shares, thus not assuming the risk of buying and reselling the shares themselves.

Under a Best Efforts Arrangement, the Investment Banker Purchases All